*This article is a discussion around the future. It is not meant, in any way, to detract from the scale of the tragedy or the loss suffered by so many. Nor is it to pass comment on the efficacy of any government’s reaction to the pandemic to this point.
As nations all over the globe count the cost of the ongoing Coronavirus pandemic, many are beginning to consider the best course of action to return societies and economies to some semblance of normality, the so-called ‘new normal’. There is clearly a need to balance the speed and immediacy of the recovery, with ensuring it is sustainable (in every sense of the word).
During lockdown, there has been some positive news for the environment. We’ve seen traffic drop to levels not seen since the 1950’s. Consequently, air pollution (both NO2 and PM2.5) has dropped, by over half in some cities. The reduced demand for electricity has meant that as of June 10th, the National Grid has used zero coal for 60 days, which includes the first coal-free month since 1882.
Clearly, as economic activity begins to ramp up, it is likely that we will need to draw on coal power again (in advance of the ban on coal generation planned for 2025). However, it presents us, and all nations, with an opportunity to take positive action in planning for a green, sustainable recovery.
Justin Addison, Second Secretary at the UK Delegation to the OSCE, at the virtual OSCE Economic and Environmental Committee Meeting on 3 June 2020, said:
And he is right. On top of the economic measures introduced during the crisis, the post-Covid world will require investment and direction. We have an opportunity to shape our future economy and society, as the barriers of the ‘status quo’ have been shattered. We should no longer worry about upsetting the apple cart, as the proverbial apples are already all over the road. We’ve heard plans for a ‘cycling revolution’, Germany’s increased electric car subsidies, and charging infrastructure expansions. For some polluting industries that may require a state bailout (such as aviation), there is an opportunity to make such support conditional, to drive the change needed to reduce emissions.
An international team of economic experts surveyed finance ministries, central banks and other organisations, and discovered that:
“...long-run multipliers of climate-positive policies were found to be high, reflective of strong return on investment for government spending” (Hepburn, C., O’Callaghan, B., Stern, N., Stiglitz, J., and Zenghelis, D. (2020),‘Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change?’, Smith School Working Paper 20-02).
Not only is an environmentally-positive recovery desirable, it could actually be the most fiscally responsible recovery as well.
We'd love to get your thoughts, drop a comment in the box below and let us know what you think the future holds.